Author: Dim Christiana Nkemakonam
Department: Business Administration
Affiliation: Nnamdi Azikiwe University Awka
The research investigates Power sector reform and business development in Nigeria. Nigeria power sector is marked by low power generating capacity relative to the installed capacity and inadequate distribution capacity with high transmission losses. In view of these problems, Nigerian government embarked on reforms in order to improve power generation, transmission, power supply and installed capacity. The objectives are to determine the contributions of power sector to business development with particular reference to manufacturing sector, to ascertain the effect of power sector on economic growth and the contributions of installed capacity of power on industrial production in the country. Ordinary least squares technique was used in the work. Data were sourced from various Publications of Power Holding Company of Nigeria (PHCN), Federal Ministry of Labour and Productivity, National Bureau of Statistics, Federal ministry of power and Central Bank of Nigeria (CBN) statistical bulletin. It was discovered from the analysis that power sector has a significant relationship with all the business indicators such as manufacturing output, industrial production, labour, technology, import and export variables used in the study. Reforms in this sector with respect to power generation have a positive contribution to manufacturing sector. The results also show that power sector has a significant relationship with economic growth and the installed capacity of power has a fair contribution on industrial production. Therefore, increase in power sector leads to subsequent increase in economic growth. Based on these facts, the study advocates that if all identified problems militating against power sector in the area of power generating contribution to the country are met, Nigeria would boast of an Electric Power Industry (EPI) that satisfies the needs of the citizen in respect of business development, thereby facilitating industrialization in the country. The study therefore strongly recommends that federal government should concentrate more on improving private sectors that have been reluctant to set up power plants in spite of the licenses granted. This will make power sector contributions more reliable, economically efficient and equitable so as to effectively support the business development in the economy.
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